The future of software patents, part 2

In part one of this series, Greg Winsky, of counsel at Archer & Greiner, discussed with us the upcoming Supreme Court case Alice Corporation Pty. Ltd. v. CLS Bank International and how that case will address an issue that has long been ignored by the highest court in the land: software patents. In part two, we’ll look at how software patents differ from other types, and what impact the ruling could have on the industry.

One of the biggest issues with software patents, says Winsky, is that there has been a general pronouncement against abstract ideas becoming patentable, like natural phenomena. The patents in the Alice case are quite simple. For example, one covers a process of exchanging financial obligation between parties and involves just four simple steps. It is something that banks do all the time, but throw in a microprocessor, and the patent office views things differently.

Another issue that Winsky sees is that, in the case of software patents, the party that becomes the defendant often does not fully understand matters. He used an analogy: If you go buy real estate, you can go to records and see the boundaries and the history of ownership. Patents are like that, as claims denote what is protected, but when the bounds are fuzzy, like in the Alice example, it becomes problematic for people to know how to navigate a particular piece of turf, which is one of the reasons that some say that software patents are not economically good for society, citing limited transparency as a major issue.

Winsky pointed out that software is protected by copyright law. In order to violate a copyright, one needs access to materials. If you reverse engineer a software system to find the source code and create something similar, that is a violation. It’s far more cut and dried than issues related to patents.

As for the future, Winsky does not foresee the Supreme Court eliminating software patents. But he notes that some large tech companies like IBM want software patents to continue to be as enforceable as possible, while others like Google are not happy with the system the way it is and want less enforceability. No matter what happens, lobbying will heat up.

As for what is happening right now, Winsky has some issues with the current Goodlatte bill and action in the Senate. As he points out, the America Invents Act just revamped the patent system in 2011, and some of the changes from that law just came into effect this year. People are trying to figure it all out, and there appears to be more change coming. As Winsky points out, the U.S. patent system has remained largely unchanged for a century, and America has led the world with that patent system. It may be a case of “if it ain’t broke, don’t try to fix it.”